SCHEDULE 14A
(Rule 14a-101)
INFORMATION REQUIRED IN PROXY STATEMENT
SCHEDULE 14A INFORMATION
Proxy Statement Pursuant to Section 14(a) of the Securities
Exchange Act of 1934 (Amendment No. )
Filed by the registrant X
Filed by a party other than the registrant
Check the appropriate box:
Preliminary proxy statement Confidential, for Use of the
Commission Only
(as permitted by Rule
14a-6(e)(2))
X Definitive proxy statement
X Definitive additional materials
Soliciting material pursuant to Rule 14a-11(c) or Rule 14a-12
IBP, inc.
(Name of Registrant as Specified in its Charter)
Payment of filing fee (Check the appropriate box):
X $125 per Exchange Act Rule 0-11(c)(1)(ii), 14a-6(i)(1), or
14a-6(j)(2) or Item 22(a)(2) of Schedule 14A.
$500 per each party to the controversy pursuant to Exchange
Act Rule 14a-6(i)(3).
Fee computed on table below per Exchange Act Rules
14a-6(i)(4)and 0-11.
(1) Title of each class of securities to which transaction
applies:
_________________________________________________________________
(2) Aggregate number of securities to which transaction
applies:
_________________________________________________________________
(3) Per unit price or other underlying value of transaction
computed pursuant to Exchange Act Rule 0-11 (Set forth the amount
on which the filing fee is calculated and state how it was
determined):
_________________________________________________________________
(4) Proposed maximum aggregate value of transaction:
_________________________________________________________________
(5) Total fee paid:
_________________________________________________________________
Fee paid previously with preliminary materials.
_________________________________________________________________
Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for which
the offsetting fee was paid previously. Identify the previous
filing by registration statement number, or the form or schedule
and the date of its filing.
(1) Amount previously paid:
_________________________________________________________________
(2) Form, schedule or registration statement no.:
_________________________________________________________________
(3) Filing party:
_________________________________________________________________
(4) Date filed:
_________________________________________________________________
March 17, 1995
Dear Stockholders:
The Annual Meeting of Stockholders will be held on April 19,
1995, at the IBP headquarters in Dakota City. The headquarters
is strategically located in the Midwest where it is close to both
the plants and the livestock that IBP processes. Our experience
to date has been that very few stockholders attend our annual
meeting. That is primarily due to our largely institutional
stockholder base and the limitation of annual meeting activities
to only those that are formally required.
To obtain information regarding the Company, investors may
now call the Investor Relations Department and receive a recorded
message of IBP's recent press releases. If access to a facsimile
machine with a polling feature is available, copies of IBP's most
recent earnings release, Annual Report, 10-K, 10-Q, Proxy
Statement or IBP Fact Sheet may be received by facsimile
transmission. The number to call is (800) 416-1027, then choose
the appropriate option.
Sincerely,
/S/ Robert L. Peterson
Robert L. Peterson
Chairman of the Board,
President
and Chief Executive Officer
IBP, inc.
IBP Avenue
Post Office Box 515
Dakota City, NE 68731
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
To Be Held April 19, 1995
To the Stockholders:
The Annual Meeting of Stockholders of IBP, inc. will be held
in the Training Room of the corporate headquarters located on IBP
Avenue in Dakota City, Nebraska, on Wednesday, April 19, 1995, at
3:00 p.m. Central Daylight Time for the following purposes:
1. To elect seven directors to serve for one year terms
expiring at the annual meeting in 1996 and until their
successors are elected and qualified;
2. To approve the performance-based bonus of the Chairman
of the Board and Chief Executive Officer for fiscal
years 1995 through 1999; and
3. To transact such other business as may properly come
before the meeting or any adjournment thereof.
Only stockholders of record at the close of business on March
10, 1995, will be entitled to notice of and to vote at the
meeting.
In order to assure a quorum, all stockholders are urged to
vote by proxy or attend the meeting. However, whether or not you
expect to attend, we urge you to read the accompanying Proxy
Statement and then complete, sign, date and return the enclosed
proxy card in the enclosed postage prepaid envelope. It is
important that your shares be represented at the meeting. Your
promptness will assist us in preparing for the meeting and
avoiding the cost of a follow-up mailing. If you receive more
than one proxy card because you own shares registered in
different names or at different addresses, each proxy card should
be completed and returned.
Robert L. Peterson
Chairman of the Board
/S/ Robert L. Peterson
Dakota City, Nebraska
March 17, 1995
IBP, inc.
IBP Avenue
Post Office Box 515
Dakota City, NE 68731
PROXY STATEMENT
GENERAL INFORMATION
The enclosed proxy card, IBP's Annual Report to Stockholders
and this Proxy Statement have been mailed to stockholders on or
about March 17, 1995, in connection with the solicitation of
proxies by the Board of Directors of IBP, inc. ("IBP") for use at
the Annual Meeting of Stockholders to be held in the Training
Room of the Corporate headquarters located on IBP Avenue in
Dakota City, Nebraska, on April 19, 1995, at 3:00 p.m. Central
Daylight Time. Stockholders of record at the close of business
on March 10, 1995, are entitled to notice of and to vote at the
meeting and at any adjournment thereof. As of the close of
business on February 28, 1995, IBP had outstanding 47,427,599
shares of Common Stock, each of which is entitled to one vote.
Unless instructed otherwise, the persons named as proxies
intend to vote shares of Common Stock represented by duly
executed proxies FOR the election of the nominees for director
selected by the Board of Directors and FOR the approval of the
performance-based bonus of the Chairman and Chief Executive
Officer. If any other business is properly brought before the
annual meeting, the proxies will be voted in accordance with the
discretion of the persons named as proxies. Any proxy may be
revoked by the stockholder at any time prior to the voting of the
proxy at the meeting by a written revocation received by the
Secretary of IBP, by properly executing and delivering a
later-dated proxy, or by attending the meeting and requesting the
return of the proxy and voting in person.
A majority of the outstanding shares of Common Stock must be
represented at the annual meeting in person or by proxy in order
to constitute a quorum for the transaction of business. The
record holder of each share of Common Stock as of March 10, 1995,
will have one vote for each share so held.
Directors are elected by a plurality of the votes cast.
Stockholders may not cumulate their votes. The seven candidates
receiving the highest number of votes will be elected as
directors. Under Delaware law and IBP's Bylaws, abstentions and
broker non-votes are not counted and have no effect on the tally
as to which of the seven candidates have received the highest
number of votes and are elected as directors, except that the
withholding or abstention of a vote denies the candidate that
vote. A vote of the majority of the shares represented at the
meeting is required for approval of the performance-based bonus
of the Chairman and Chief Executive Officer. The effect of an
abstention on the approval of the performance-based bonus of the
Chairman and Chief Executive Officer is the same as a vote
against the performance-based bonus of the Chairman and Chief
Executive Officer. A broker non-vote has no effect on the vote
for or against the performance-based bonus of the Chairman and
Chief Executive Officer.
Under certain conditions, if you do not exercise the voting
rights of stock in which you hold the beneficial interest, those
shares might be voted by the record owner.
Solicitation of Proxies
The expense of this solicitation will be paid by IBP. To the
extent necessary to assure sufficient representation at the
meeting, proxies may be solicited by any appropriate means by
officers, directors and regular employees of the Company for
which they will receive no additional compensation. IBP will
retain the services of Corporate Investor Communications, Inc. at
a cost of approximately $6,500, plus certain mailing costs, to
deliver proxy material and to aid in the solicitation of proxies
to ensure that a quorum is represented at the annual meeting.
IBP will pay persons holding stock in their names or the names of
their nominees, but not owning such stock beneficially, such as
brokerage houses, banks and other fiduciaries, for the expense
of forwarding soliciting material to their principals.
Stockholder Proposals for 1996 Annual Meeting
In the event that any stockholder desires to submit a proposal
for action at the 1996 Annual Meeting of Stockholders, such
proposal must be received at IBP's principal offices at IBP
Avenue, Post Office Box 515, Dakota City, Nebraska 68731, marked
to the attention of the Secretary of IBP, no later than November
17, 1995. It is suggested that any stockholder desiring to
submit a proposal do so by Certified Mail, Return Receipt
Requested. Stockholders should also note that, in addition to
the requirement of timely receipt by IBP of a proposal, a
proposal must comply with the requirements of Section 14(a) of
the Securities Exchange Act of 1934 to be included in the proxy
solicitation material for the 1996 Annual Meeting of
Stockholders.
SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS
As of March 6, 1995, to the knowledge of IBP, no person
beneficially owned 5% or more of any class of the outstanding
voting securities of IBP, except as follows:
Name and Address of Amount and Nature Percent of
Beneficial Owner of Beneficial Class (%)
Title of Class Ownership (#)
Common Stock Pioneering Management Corp. 3,604,900(1) 7.6
60 State Street
Boston, MA 02114
Common Stock Mellon Bank Corporation 3,265,000(2) 6.9
One Mellon Bank Center
Pittsburgh, PA 15258
__________________
(1) Pioneering Management Corporation has sole
investment power over 204,900 shares, and sole voting power over
3,604,900 shares, according to its Schedule 13G dated January 18,
1995, and filed with the Securities Exchange Commission ("SEC").
(2) Mellon Bank Corporation has sole investment power
over 2,240,000 of the shares listed above, and sole voting power
over 2,545,000 shares, according to its Schedule 13G dated
February 9, 1995, and filed with the SEC.
ELECTION OF DIRECTORS
It is intended that proxies received will be voted FOR the
election of seven nominees as directors unless authority to so
vote is withheld.
Although the Board of Directors does not know of any reason why
any nominee will be unavailable for election, in the event any
nominee should be unavailable at the time of the meeting, the
proxies may, but need not, be voted for a substitute nominee
selected by the Board of Directors.
The Bylaws of IBP provide that any stockholder entitled to vote
for the election of directors at a meeting may nominate persons
for election as directors by giving timely notice in proper
written form, containing the information required by the Bylaws,
to the Secretary of IBP. To be timely, such notice must be
delivered to or mailed to and received at the principal executive
offices of IBP not less than 30 nor more than 60 days prior to
the meeting; provided, however, that if less than 40 days' notice
or public disclosure of the date of the meeting is given or made
to stockholders, notice by the stockholder to be timely must be
so received not later than the close of business on the tenth day
following the day on which such notice of the date of the meeting
was mailed or such public disclosure was made, whichever first
occurs.
The following biographical information is furnished as of
January, 1995,with respect to each of the seven nominees for
election as director at the annual meeting.
JOHN S. CHALSTY, 61 Director since 1987
Mr. Chalsty was elected President and Chief Executive Officer
of Donaldson, Lufkin & Jenrette, Inc. ("DLJ") on September 4,
1986, after having served as Chairman of DLJ's Capital Markets
Group for more than two years. He joined the firm in 1969 as an
oil analyst. He was named director of research and elected to
DLJ's Board of Directors in 1972 and was appointed head of the
investment banking division in 1979. When the firm was
reorganized in January, 1984, Mr. Chalsty was named Chairman of
the Capital Markets Group. Currently, Mr. Chalsty is also a
member of the Board of Directors of Anchor Glass Container and
Trident NGL, Inc. He is the Vice Chairman and a Director of the
New York Stock Exchange. Mr. Chalsty is also a member, past
President and Director of the New York Society of Security
Analysts, a member and past Director of the Financial Analysts
Federation and a member of the Executive Council on Foreign
Diplomacy, Board of Overseers. In addition, Mr. Chalsty is a
Director, Vice President and Chairman of the Finance Committee of
the Girl's Club of New York, Director and Chairman of the Finance
Committee of the Teagle Foundation, Inc., a Director of the
Lincoln Center Theater, a Director of the Foundation for the
Joffrey Ballet, Inc. and a member of the Board of Trustees of The
Saint Barnabas Medical Center.
ALEC P. COURTELIS, 68 Director since 1987
Mr. Courtelis founded Courtelis Companies, a real estate
development firm, in 1961 and has been its President and Chairman
of the Board since that time. In 1970 Mr. Courtelis founded Town
and Country Farms in Ocala, Florida, which is the largest
breeding and training operation for Arabian race horses in the
United States. Mr. Courtelis is currently the Finance Chairman
for the Republican Party of Florida and was National Finance
Co-Chairman for the Bush-Quayle 1992 campaign. He is a Director
of TGIF Texas, Inc. and of Devcon International Corp. Mr.
Courtelis is Vice Chairman of the Board of Regents for the
Florida State University System, Chairman of the Armand Hammer
United World College of the American West and a member of the
International Board of the United World College.
DR. WENDY L. GRAMM, 50 Director since 1993
Dr. Gramm chaired the Commodity Futures Trading Commission
from 1988 to 1993. She has served as Administrator for
Information and Regulatory Affairs at the White House Office of
Management and Budget (OMB) and was the Executive Director of the
Presidential Task Force on Regulatory Relief. Dr. Gramm also
directed the Federal Trade Commission's Bureau of Economics. She
holds a Ph.D. in economics from Northwestern University and began
her career as a professor of economics at Texas A&M University.
Dr. Gramm currently is a Professor of Economics and
Administration at the University of Texas in Arlington and is a
self-employed consultant. She serves on the Board of Visitors,
College of Business Administration at the University of Iowa, the
International Capital Markets Advisory Committee to the New York
Stock Exchange Board of Directors, the National Advisory Boards
of the Independent Women's Forum and the International Republican
Institute. She is Chairman of Northwestern University's Council
of One Hundred and the Republican Women's Federal Forum. She has
also been named to the Boards of Directors of Enron Corporation,
State Farm Insurance Companies and the Chicago Mercantile
Exchange.
EUGENE D. LEMAN, 52 Director since 1989
Mr. Leman has served as Executive Vice President, Pork Division
of IBP since 1986. Prior to joining IBP he held various
executive positions with Wilson Foods Corporation including Vice
President of Fresh Meat and Vice President of Fresh and Processed
Pork. He joined IBP in 1981 and has previously served as Group
Vice President of Pork.
ROBERT L. PETERSON, 62 Director since 1976
Mr. Peterson has served as Chairman of the Board, President and
Chief Executive Officer of IBP since August 12, 1981. Mr.
Peterson joined IBP in 1961. He left IBP in 1969 for a period
during which he started a pork products company, Madison Foods,
Inc. He returned to IBP in 1976 when IBP acquired Madison Foods,
Inc. In 1977, he was elected IBP's President and Chief Operating
Officer. Mr. Peterson is a Director of Midwest Resources, Inc.
and the Omaha Branch of the Federal Reserve Bank of Kansas City.
JOANN R. SMITH, 55 Director since 1993
Ms. Smith served as Assistant Secretary for Marketing and
Inspection Services for the United States Department of
Agriculture (USDA) from 1989 to 1993 and has served in numerous
capacities in the livestock industry. She is a former President
of the National Cattlemen's Association and has chaired the
Cattlemen's Beef Promotion and Research Board. She is on the
Board of Directors for Purina Mills, Inc. Ms. Smith acts as
Secretary and Treasurer for Smith Brothers, a farming and
ranching operation, is the Secretary and Treasurer for Smith
Construction and is President of Smith Associates, an
agricultural marketing business.
DALE C. TINSTMAN, 75 Director since 1962
Mr. Tinstman, a business consultant, is Chairman of the Board
of Plaza, Inc., a private company, a Director of Smith Hayes
Trust, Inc. and Chairman of the University of Nebraska
Foundation. He served as a financial consultant for IBP before
being elected President and Chief Operating Officer in 1976, a
position he held until 1977. From 1977 to January 1981 he served
as Vice Chairman of the Board of IBP and in January 1981 became
Co-Chairman of the Board, a position he held until 1982.
Information Regarding the Board of Directors and its Committees
The Board of Directors has established an Audit Committee,
Compensation Committee, Executive Committee, Nominating
Committee, Plans Administration Committee and Directors Plan
Committee.
The Board of Directors met five times during the 1994 fiscal
year. All directors, except Mr. Courtelis, attended at least 75
percent of the Board of Directors and committee meetings for
which they were eligible. Mr. Courtelis missed several board and
committee meetings during 1994 due to illness.
The Executive Committee, during the intervals between meetings
of the Board of Directors, exercises all powers of the Board of
Directors, except as otherwise provided by law and the IBP
Bylaws. The members of the Executive Committee currently are
Messrs. Peterson (Chairman) and Leman. The Executive Committee
did not meet during 1994 but did take action by consent without a
meeting.
The Audit Committee selects the firm of independent public
accountants to audit the financial statements of IBP and its
consolidated subsidiaries, subject to approval of the Board of
Directors; discusses with the independent public accountants the
scope and results of their audit; discusses with the independent
public accountants, and with the management of IBP, IBP's
financial, accounting and reporting principles, policies and
practices; discusses with the independent public accountants, and
with the Controller of IBP and his staff, the adequacy of the
corporation's accounting, financial and operating controls; and
reports to the Board of Directors. The members of the Audit
Committee currently are Messrs. Tinstman (Chairman), Chalsty and
Courtelis, Dr. Gramm and Ms. Smith. The Audit Committee held
three meetings during 1994.
The Compensation Committee reviews and approves compensation
arrangements, including annual incentive awards, for officers of
IBP. The members of the Compensation Committee currently are
Messrs. Chalsty (Chairman) and Courtelis, Dr. Gramm and Ms.
Smith. The Compensation Committee held two meetings during 1994.
The Nominating Committee makes recommendations as to candidates
for election to the Board of Directors and their qualifications
to fill board vacancies in connection with proposed slates of
nominees for directors for whose election proxies will be
solicited by the Board of Directors. The Nominating Committee
will consider properly submitted recommendations of stockholders
if the recommendation is submitted pursuant to the procedures
previously outlined. The members of the Nominating Committee
currently are Dr. Gramm (Chairman), Messrs. Chalsty, Courtelis
and Tinstman, and Ms. Smith. The Nominating Committee held one
meeting during 1994.
The Plans Administration Committee administers the restricted
stock and employee stock option plans of IBP. The members of the
Plans Administration Committee currently are Messrs. Courtelis
(Chairman) and Chalsty, Dr. Gramm and Ms. Smith, none of whom are
eligible for selection as participants in these plans. The Plans
Administration Committee held two meetings during 1994.
The Directors Plan Committee administers the stock option plan
for non-employee directors of IBP. The members of the Directors
Plan Committee currently are Messrs. Peterson (Chairman) and
Leman, neither of whom are eligible for participation in the
plan. The Directors Plan Committee did not meet during 1994.
Information Regarding Directors' Compensation
Officers of IBP who are also directors do not receive any fee
or remuneration for services as members of the Board of Directors
or of any committee of the Board of Directors. Nonmanagement
directors receive a retainer fee of $20,000 per annum plus $900
for each board or committee meeting that they attend.
Nonmanagement directors also receive stock options pursuant to
the IBP Directors Stock Option Plan.
In January 1993, IBP entered into a consulting agreement with
Mr. Tinstman. Mr. Tinstman agreed to continue to act as an
independent general consultant to IBP. Pursuant to such
agreement, Mr. Tinstman will receive $3,000 per month as long as
the agreement is in effect. In addition, Mr. Tinstman is
entitled to hospitalization coverage and, subject to IBP's best
efforts, disability insurance. Mr. Tinstman also receives the
annual retainer and meeting fees paid to nonmanagement directors
of IBP and stock options pursuant to the IBP Directors Stock
Option Plan.
SECURITY OWNERSHIP OF MANAGEMENT
The following table sets forth, as of February 28, 1995,
beneficial ownership of IBP Common Stock, the sole class of IBP
stock, for each director of IBP, for each person nominated as a
director of IBP, for each executive officer named in the Summary
Compensation Table and for all directors and executive officers
(including those executive officers not named in the Summary
Compensation Table) of IBP as a group. Unless otherwise
indicated, the persons named below have sole voting and
investment power with respect to the Common Stock shown as
beneficially owned by them.
Amount and
Nature of
Beneficial Percent
Name of Beneficial Owner - Ownership(#)(1) of Class
Position with IBP (%)(3)
Richard L. Bond - Executive Officer 3,716 *
John S. Chalsty - Director 2,900 *
Alec P. Courtelis - Director 1,400 *
Wendy L. Gramm - Director 0 *
Lonnie O. Grigsby - Executive Officer 31,346 *
David C. Layhee - Executive Officer 25,001 *
Eugene D. Leman - Director and Executive
Officer 38,017 *
Robert L. Peterson - Director and
Executive Officer 172,100 *
JoAnn R. Smith - Director 1,000 *
Dale C. Tinstman - Director 5,382(2) *
All Directors and Executive Officers
As A Group (13 Persons) 331,563 *
__________________
(1) Includes the following shares which are subject to stock
options granted pursuant to the IBP 1987 Stock Option Plan, the
IBP 1993 Stock Option Plan and the IBP Directors Stock Option
Plan exercisable as of February 28, 1995, or within 60 days
thereafter: Mr. Bond 3,716; Mr. Chalsty 400; Mr. Courtelis 400;
Mr. Grigsby 17,620; Mr. Layhee 12,580; Mr. Leman 18,000; Mr.
Peterson 112,000; Mr. Tinstman 400 and all other Executive
Officers 36,798.
(2) Includes 689 shares owned by Mr. Tinstman's wife, as to
which Mr. Tinstman disclaims any beneficial ownership.
(3) As a group, and individually, the executive officers,
directors and nominees for director beneficially own less than 1%
of IBP's Common Stock.
JOINT REPORT OF THE COMPENSATION
AND PLANS ADMINISTRATION COMMITTEES
Compensation and Plans Administration Committees
The Compensation Committee of the Board of Directors is
comprised entirely of disinterested and outside directors. The
Committee is responsible for establishing the levels of
compensation (except stock option grants and long-term stock
awards) for the executive officers of the Company. The Committee
annually evaluates IBP's performance and compensation paid to its
executive officers.
The Plans Administration Committee reviews and approves the
grant of stock options and awards of restricted stock pursuant to
IBP's stock option and long-term stock plans for the Company's
officers and employees. This committee is comprised entirely of
disinterested and outside directors.
Committees' Report on Executive Compensation
Base Salary
The annual compensation of executive officers of IBP includes
a base salary, coupled with a cash bonus which is calculated in
accordance with an established formula based on the operating
income of IBP. The Compensation Committee from time to time uses
outside consultants and published compensation survey data to
review competitive rates of pay, to establish salary ranges and
to set target base salary levels for officers. The amount of the
employee's base salary is a function of the employee's officer
position, or grade level, and individual performance. The
employee's individual performance is measured against
expectations related to budgetary performance or operating income
results and operating performance standards.
Bonus Payments
The annual compensation of employees participating in IBP's
management bonus program, including executive officers, is
dependent on overall corporate performance for staff officers and
on the results of divisional operating income and operating
performance for operating division officers. The dollar amount
of the bonus pool from which bonuses are paid is established as a
percent of operating income as adjusted for non-operating
expenses such as pushdown accounting. Target bonuses are based
on the percent of increase or decrease in such operating income
from the prior year.
Stock Option Grants and Restricted Stock Awards
IBP has stock option and long-term stock plans for its
officers, including executive officers. The purpose of the plans
is to assist in securing and retaining employees of ability by
making it possible to offer them an incentive, in the form of a
proprietary interest in IBP, to join or continue in the service
of IBP and to increase their efforts on its behalf.
Levels for both stock options grants and restricted stock
awards are established by the Plans Administration Committee on
the basis of an employee's officer position, or grade level.
Options are granted for terms of ten years and become exercisable
in increments beginning after the second and continuing through
the fifth year of the option term. The restricted stock awards
are made subject to continued employment, generally for five
years.
Corporate Performance
In evaluating corporate performance to establish compensation
for fiscal year 1994, the Compensation Committee considered the
fact that operating income for 1993 for bonus purposes was up 8%
from 1992 and earnings per share were up to $1.88 in 1993 from
$1.34 in 1992. In addition, differences in divisional operating
earnings performance caused differences in divisional officer
bonuses. The Compensation Committee established a salary
increase budget of 3% for fiscal year 1994 for officers. The
budget percentage was based on the standard percentage increase
for all management employees of the Company. Individual salary
increases were determined for all management employees, including
executive officers, based on each individual's contributions to
operating unit and corporate performance.
Compensation of Chief Executive Officer
The Chairman and Chief Executive Officer's salary and
performance-based bonus for 1994 were established by the
Compensation Committee in December of 1993. Mr. Peterson's base
salary was decreased to $1,000,000 from $1,240,000. His
performance-based bonus was established at 1.3% of the first
$100,000,000 of operating income, after adjustments and
consistent with the bonus calculations for management generally,
and 1% of any operating income that exceeded $100,000,000, this
bonus formula was approved by stockholders at the annual meeting.
These actions were based on the changes to Section 162(m) of the
Internal Revenue Code which requires that any compensation over
$1,000,000 be performance-based (or meet other exceptions
provided by the Section) to be deductible by the Company. The
salary and performance-based bonus were determined pursuant to
the changes to Section 162(m) and in order to retain Mr. Peterson
as Chairman and Chief Executive Officer. The bonus method was
designed to incentivize Mr. Peterson with a performance-based
bonus that was competitive with the industry and also allows the
Company to take a deduction for federal income tax purposes.
John S. Chalsty Alec P. Courtelis Wendy L. Gramm
JoAnn R. Smith
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION IN
COMPENSATION DECISIONS
The members of the Compensation Committee are Messrs. Chalsty
(Chairman) and Courtelis, Dr. Gramm and Ms. Smith.
SUMMARY COMPENSATION TABLE (1)
ANNUAL COMPENSATION
Name and Principal Year Salary Bonus
Position ($) ($)(2)
Robert L. Peterson 1994 1,000,000 3,872,990
Chairman, President 1993 1,240,000 1,848,048
& Chief Executive 1992 1,200,000 1,545,658
Officer
Eugene D. Leman 1994 190,372 362,267
Executive Vice 1993 179,275 149,014
President, Pork Division 1992 166,994 185,889
Lonnie O. Grigsby 1994 155,694 255,139
Executive Vice 1993 150,691 145,794
President, Finance 1992 143,737 141,235
& Administration
Richard L. Bond 1994 138,902 300,000
Group Vice President, 1993 108,321 102,692
Beef Markets & Sales 1992 101,854 90,171
David C. Layhee 1994 142,470 250,000
Group Vice President, 1993 127,412 110,483
Design Products 1992 120,755 95,154
LONG TERM
COMPENSATION AWARDS
Restricted Securities
Stock Underlying All Other
Awards Options Compensation
Year ($)(3) (#) ($)(4)
Robert L. Peterson 1994 30,000 171,340
1993 1,612,500 60,000 108,440
1992
Eugene D. Leman 1994 6,000 19,140
1993 450,000 12,000 10,436
1992 2,000
Lonnie O. Grigsby 1994 6,000 15,654
1993 380,668 12,000 8,771
1992 2,000
Richard L. Bond 1994 298,850 6,640 13,952
1993 250,000 10,080 6,308
1992 1,700
David C. Layhee 1994 298,850 6,640 14,319
1993 250,000 10,080 7,418
1992 1,700
_______________________________
(1) The personal benefits provided by IBP to the named executive
officers do not exceed the threshold for disclosure established
by the SEC and are not described in the table. No other types of
compensation required to be reported in the table were paid or
were payable to any of the named executive officers and,
therefore, columns which the SEC regulations created to report
"Other Annual Compensation" and "Long-Term Incentive Plan
Payouts" have been deleted from the table. IBP has not granted
any SARs pursuant to the IBP 1993 Stock Option Plan and IBP has
therefore removed SARs from the columns of this table and
reported only options.
(2) Amounts shown for 1993 and 1994 are bonus amounts only.
Amounts shown for 1992 include both cash bonuses and profit
sharing contributions that were either deferred or paid in cash.
(3) Restricted stock was granted to certain officers pursuant to
the IBP Officer Long-Term Stock Plan. The shares vest five years
from the date of grant contingent upon continued employment with
IBP. Early vesting may occur pursuant to the Plan's provisions
due to events such as death or total disability. The value of
the shares on the date of grant is listed for the named
executive officers in the Summary Compensation Table. Dividends
paid on the restricted stock are used to purchase additional
shares of restricted stock pursuant to the provisions of the
Plan. These additional shares are then credited to an officer's
award. The number of shares of restricted Common Stock in each
named officer's account pursuant to the IBP Officer Long-Term
Stock Plan on December 31, 1994, and the aggregate fair market
value of the shares based upon a fiscal year-end closing price of
$30.25 per share, were as follows: Mr. Peterson - 101,453 shares
valued at $3,068,953, Mr. Leman - 28,313 shares valued at
$856,468, Mr. Grigsby - 23,846 shares valued at $721,342, Mr.
Bond -24,785 shares valued at $749,746, and Mr. Layhee - 24,785
shares valued at $749,746.
(4) All Other Compensation includes 1993 and 1994 profit sharing
contributions made by the Company into the named officers account
in the IBP Retirement Income Plan "RIP"). In 1993 a provision
was added to the RIP that made deferral of profit sharing into
the RIP mandatory. SEC regulations now require the profit
sharing amount to be reported in All Other Compensation and not
in the Bonus column. The profit sharing amount attributable to
each named officer for 1994 is as follows: Mr. Peterson -
$130,000, Mr. Leman - $19,037, Mr. Grigsby - $15,569, Mr. Bond -
$13,890 and Mr. Layhee - $14,247. All Other Compensation also
reports life insurance premiums paid by the Company for the named
officer. The amount of insurance premiums paid by the Company,
and any cash surrender value the named officer is entitled to
under a policy, is as follows: Mr. Peterson - $41,340, $38,253
of this amount represents the cash surrender value of a policy
and $3,087 represents the premiums paid, Mr. Leman - $103, Mr.
Grigsby - $85, Mr. Bond - $62, and Mr. Layhee - $72.
Employment Contracts
Except for Mr. Peterson, IBP has employment agreements with all
of its executive officers, including Messrs. Leman, Grigsby, Bond
and Layhee. Each agreement is for a term of five years, Messrs.
Leman's and Grigsby's commenced October 9, 1992, Messrs. Bond's
and Layhee's commenced October 18, 1994, and each provides for a
one year non-compete obligation from the employee at the
termination of employment with IBP. The agreement provides for,
among other things, a minimum base salary and participation in
IBP employee benefit plans including specifically stock options
and the IBP Officer Long-Term Stock Plan as an incentive to an
employee's long term commitment to IBP. For the four executive
officers named in the Summary Compensation Table who currently
have employment contracts, the minimum base salaries are: Mr.
Leman - $168,071, Mr. Grigsby - $151,897, Mr. Bond - $175,000 and
Mr. Layhee - $175,000. While the agreements terminate by their
terms after five years, either party to an agreement has the
right to terminate it, subject to the non-compete obligation,
upon one year's notice.
IBP does not have termination or change of control plans or
contracts with any of its employees.
OPTION GRANTS TABLE
Option Grants in 1994 (1)
Individual Grant
Number of Percent of
Securities Total Options
Underlying Granted to Exercise or
Options Employees in Base Price Expiration
Name Granted Fiscal Year(%) ($/share) Date
(#)(2)
Robert L. Peterson 30,000 5.74% 32.75 10/01/04
Eugene D. Leman 6,000 1.15% 32.75 10/01/04
Lonnie O. Grigsby 6,000 1.15% 32.75 10/01/04
Richard L. Bond 5,040 .96% 32.75 10/01/04
1,600 .31% 34.25 10/18/04
David C. Layhee 5,040 .96% 32.75 10/01/04
1,600 .31% 34.25 10/18/04
Potential Realizable Value at
Assumed Annual Rates of Stock
Price Appreciation for Option
Terms (10 years)
5%($) 10%($)
Robert L. Peterson 617,889 1,565,852
Eugene D. Leman 123,578 313,170
Lonnie O. Grigsby 123,578 313,170
Richard L. Bond 103,805 263,063
34,363 87,337
David C. Layhee 103,805 263,063
34,363 87,337
______________________
(1) IBP has not granted any SARs pursuant to the IBP 1993 Stock
Option Plan. IBP has therefore removed SARs from the title and
columns of this table and has reported only options.
2) All options were granted pursuant to the IBP 1993 Stock
Option Plan. The options are granted for terms of ten years and
become exercisable in increments beginning after the second and
continuing through the fifth year of the option term. All
options are priced at the fair market value of the IBP Common
Stock on the date of the grant. The options are eligible for
"incentive stock option" treatment under the applicable Internal
Revenue Code provisions.
AGGREGATED OPTION EXERCISES AND YEAR-END OPTION VALUES TABLE
Aggregated Option Exercises in 1994
and 1994 Year-End Option Values (1)
Number of Securities
Underlying Unexercised
Shares Options at 1994
Acquired on Value Year-End (#)
Name Exercise (#) Realized ($) Exercisable Unexercisable
Robert L.Peterson 0 0 100,000 90,000
Eugene D. Leman 0 0 15,600 20,400
Lonnie O. Grigsby 0 0 15,220 20,400
Richard L. Bond 3,030 44,423 1,700 18,760
David C. Layhee 0 0 12,580 18,760
Value of Unexercised
In-The-Money Options
at 1994 Year-End ($)
Exercisable Unexercisable
Robert L. Peterson 1,775,000 483,750
Eugene D. Leman 259,800 132,700
Lonnie O. Grigsby 251,233 132,700
Richard L. Bond 25,203 111,828
David C. Layhee 209,525 111,828
______________________
(1) IBP has not granted any SARs pursuant to the IBP 1993 Stock
Option Plan. IBP has therefore removed SARs from the title and
columns of this table and has reported only options granted.
PERFORMANCE GRAPH
As part of the compensation rules implemented by the SEC a
performance graph must be included in the proxy statement that
compares the registrant's stock performance over the past five
years against the performance of both an equity market index and
a peer group index that cover the same five year period. In 1994
IBP used the S&P 500 as the equity market index and the S&P 400
as the peer group index. These indexes have been used again in
1995.
IBP, inc.
Comparison of Five Year Cumulative Total Return
IBP, inc., S&P 500 Index and S&P 400 Index
1989 1990 1991 1992 1993 1994
IBP, inc. 100.00 141.67 100.27 139.27 182.99 219.72
S&P 500 100.00 96.45 123.06 137.15 148.84 150.56
S&P 400 100.00 94.43 138.49 155.98 176.70 173.97
(1)Assumes $100 invested on December 29, 1989, in the S&P 500
Index, S&P 400 Index and IBP, inc. Common Stock. Each of the
three measures of cumulative total return assumes reinvestment of
dividends.
<PAGE>
APPROVAL OF MATTERS BEING SUBMITTED TO VOTE OF STOCKHOLDERS
The Board of Directors is proposing that the stockholders
approve at the 1995 annual meeting the performance-based bonus of
the Chairman and Chief Executive Officer. Such approval is
necessary to satisfy the requirements of Section 162(m) of the
Internal Revenue Code to ensure deductibility by the Company of
compensation that exceeds one million dollars for purposes of
federal corporate income tax.
Performance-Based Bonus of the Chairman of the Board and the
Chief Executive Officer.
The purpose of the performance-based bonus is to provide
compensation to the Chairman and Chief Executive Officer that is
competitive with the industry and that, at the same time, ensures
deductibility for purposes of Section 162(m) of the Internal
Revenue Code. Section 162(m) requires that any compensation over
one million dollars be performance-based (or meet other
exceptions provided by the Section) and be approved by
stockholders to be deductible. If the bonus is not approved by
stockholders, any compensation that exceeds one million dollars
is not deductible.
The Compensation Committee of the Board of Directors has set
the Chairman and Chief Executive Officer's salary at $1,000,000
and has set a bonus formula for the Chairman and Chief Executive
Officer for fiscal years 1995 through 1999. This bonus formula
is subject to stockholder approval. The bonus formula takes the
percentage used to calculate the Chairman's bonus for the first
one hundred million of operating earnings from the prior year
(1.3 percent in fiscal 1994), times one plus the percent of
average salary increase for IBP management for the bonus year
expressed in decimal form, the product of which gives the
"Derived Percentage". The annual bonus for the Chairman would
then be the Derived Percentage of the first one hundred million
of operating earnings plus one percent of any excess over one
hundred million dollars. Earnings from operations for purposes
of management bonuses are calculated prior to the effects of
pushdown accounting and other non-recurring items. An example of
this calculation is shown in the NEW PLANS BENEFITS table below.
NEW PLANS BENEFITS (1)
Performance-Based Bonus
Name and Position Dollar
Value ($)
Robert L. Peterson, Chairman,
President & Chief Executive Officer . . . . . . $3,911,990(2)
(1) This table describes the bonus the Chairman would have
received for 1994 under the performance-based bonus program being
submitted to stockholders for approval in 1995. Since operating
earnings are not available for 1995, SEC rules require that the
registrant report the amount of benefits receivable as if the
plan had been in effect during the prior year. For 1994 the
average salary increase for IBP management was 3% and operating
earnings for the purpose of calculating the Chairman's bonus were
$357,299,044. In 1993 the Chairman's bonus was not based on a
performance formula, but for the purposes of this calculation it
is assumed that the performance formula started in 1993 and that
the Chairman received 1.3% of the first one hundred million of
operating earnings for 1993.
(2) The performance-based bonus calculation (as proposed, and
based on the assumptions made in footnote 1) would be 1.3% (the
prior year's percentage) times 1.03 (one plus the percent of
average salary increase for management expressed in decimal
form), which equals 1.339%, the Derived Percentage. The bonus
would then be 1.339% of $100,000,000 plus 1% of $257,299,044 for
a total bonus of $3,911,990.
COMPLIANCE WITH SECTION 16(A) OF THE SECURITIES ACT OF 1934
Section 16(a) of the Securities Exchange Act of 1934 requires
the Company's executive officers and directors, and persons who
own more than ten percent of a registered class of the Company's
equity securities, to file reports of ownership and changes in
ownership with the Securities and Exchange Commission ("SEC") and
the New York Stock Exchange. Executive officers, directors and
greater than ten-percent stockholders are required by SEC
regulations to furnish the Company with copies of all Section
16(a) forms they file.
Based solely on review of the copies of such forms furnished
to the Company, or written representations that Form 5s were not
required, the Company believes that during the fiscal year ending
December 31, 1994, there was compliance with all Section 16(a)
filing requirements applicable to its executive officers,
directors and greater than ten-percent beneficial owners, except
John Chalsty, who was late in filing two Form 4s. Each Form 4
reported one transaction involving less than 550 shares of IBP
Common Stock.
INDEPENDENT CERTIFIED PUBLIC ACCOUNTANTS
The Audit Committee of the Board of Directors of IBP selected
Price Waterhouse as independent public accountants to audit the
consolidated financial statements of IBP and its consolidated
subsidiaries for fiscal year 1994. Price Waterhouse has audited
IBP's financial statements annually since 1992.
During IBP's two most recent fiscal years there had been no
disagreements with IBP's accountants on any matter of accounting
principles or practices, financial statement disclosure, or
auditing scope or procedure, nor has the principal accountant's
reports on IBP's financial statements for either of the past two
years contained any adverse opinion or disclaimer of opinion,
qualification or modification as to uncertainty, audit scope or
accounting principles.
A member of Price Waterhouse is expected to be present at the
Annual Meeting of Stockholders, will have an opportunity to make
a statement if so desired and will be available to respond to
appropriate questions.
OTHER MATTERS
The Board of Directors is not aware of any other matters to be
presented at the meeting. However, if any such matters are
presented for action, it is the intention of the proxy holders
named in the enclosed proxy card to vote in accordance with their
discretion on such matters unless stockholders specify otherwise.
By Order of the Board of Directors
/S/ Lonnie O. Grigsby
Lonnie O. Grigsby
Secretary<PAGE>
If no direction is given, this proxy will be voted FOR Items 1
and 2.
The Board of Directors Recommends a Vote FOR Item 1.
Item 1 - Election of directors duly nominated
John S. Chalsty, Alec P. Courtelis, Wendy L. Gramm Eugene D.
Leman, Robert L. Peterson, JoAnn R. Smith and Dale C. Tinstman
For Withheld
(To withhold authority to vote for any individual nominee, write
that nominee's name on the line below)
__________________________________________________________
The Board of Directors Recommends a Vote FOR Item 2.
Item 2 - Approval of the performance - based bonus of the
Chairman and Chief Executive Officer.
For Against Abstain
Please mark, date and sign as your name appears below and return
it in the enclosed envelope. If acting as executor,
administrator, trustee, guardian, etc., you should indicate when
signing. If the signer is a corporation or partnership, please
sign in full corporate or partnership name, by President,
authorized officer, or authorized partner. If shares are held
jointly, each shareholder named should sign.
Date
Signature
Signature
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^ FOLD AND DETACH HERE ^
Annual Meeting
of
IBP, inc.
Wednesday, April 19, 1995
Agenda
* Election of Directors
* Ratification of the performance-based bonus of the
Chairman and Chief Executive Officer
* Transaction of other business properly brought
before the meeting or any adjournment thereof
PROXY
SOLICITED BY THE BOARD OF DIRECTORS for Annual Meeting of
Stockholders
IBP, inc.
Corporate Headquarters
Training Room
IBP Avenue
Dakota City, Nebraska 68731
WEDNESDAY, APRIL 19, 1995 - 3:00 P.M.
The undersigned stockholder hereby appoints Robert L. Peterson
and Lonnie O. Grigsby, or either of them, the proxies of the
undersigned to vote, as indicated on the reverse side, all shares
registered in the name of the undersigned on all matters which
may come before the 1995 Annual Meeting of Stockholders of IBP,
inc. or any adjournment thereof.
The shares represented by this proxy will be voted as directed by
the stockholder. If no direction is given such shares will be
voted for Items 1 and 2, and in accordance with the discretion of
the persons named as proxies on all other business.
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^ FOLD AND DETACH HERE ^
Annual Meeting of Stockholders
April 19, 1995
In order to assure a quorum, all stockholders are urged to vote
by proxy or attend the meeting. However, whether or not you
expect to attend, we urge you to read the accompanying Proxy
Statement and then complete, sign, date and return the proxy card
in the enclosed postage prepaid envelope. It is important that
your shares be represented at the meeting. Your promptness will
assist us in preparing for the meeting and avoiding the cost of a
follow-up mailing. If you receive more than one proxy card
because you own shares registered in different names or at
different addresses, each proxy card should be completed and
returned.
